Goodman Group
has unveiled its controversial proposal to buy the Moorabbin Airport in Victoria, and its adjoining business park, from a company associated with chief executive
Greg Goodman
.

The group will pay the Goodman family company $201.5 million, “supported by’’ an independent valuation from CB Richard Ellis.

The deal, which has to be approved by security holders, will involve the issue of $146.5 million of securities – at 65¢ and to be held in escrow – to the Goodman family, as well as $35 million in vendor finance and $20 million in cash.

The group said the deal would not affect gearing or liquidity, and would increase net tangible asset backing up by 0.3¢.

Goodman Group chairman Ian Ferrier said the deal would align the financial activities of Greg Goodman with the Goodman Group. “The $146 million of equity will be largely held by Goodman Holdings, in which he [Greg Goodman] is the majority investor," he said. The proposal is bound to be controversial, and ­attracted much criticism at the ­annual general meeting last year.

“These deals are never kosher. There is an essential conflict of interest that cannot be denied," said an ­investor at the time.

Mr Ferrier acknowledged there would be some objections to the proposal because it was a related-party transaction. However he had spoken to the major investors, and to the China Investment Corporation, and all had given “in principle" approval.

“I have Greg involved in the business for over $100 million. Greg and this company are inextricably linked. Having him with skin in the game is really important," he said.

Mr Goodman confirmed Goodman Holdings or any other Goodman family member did not own any more industrial assets.

“It’s the board’s policy to ensure that doesn’t happen because that could put Greg or the corporation in a position where we have to choose between alternative sources of land," said Mr Ferrier.

The 294 hectare airport and business park in Melbourne’s inner south-east is a Masterplan-approved site from the Commonwealth government.

It has $91.6 million of income-producing investments across 50 ha with 100 per cent occupancy.

In addition, the site has $87.8 million of proven development land across 73 ha with a range of Master-plan-approved usage options and ­includes $22.1 million of aviation ­activities across 171 ha.

The Goodman Group has had an active interest in Chifley Business Park, which also forms part of the property, since 1999. Chifley Business Park represents 37 ha and is valued at $106 million.

Goodman Holdings, the operator of the Moorabbin Airport since 1998, has been retained under a separate Airport Management Agreement for the next 10 years.

“We don’t wish to operate an airport, we don’t have a skill base there, so we wanted to retain the existing ­expertise, which was held by Goodman Holdings in relation to that ­operation," said Mr Ferrier.

“It’s important we control the whole real estate so that whatever we want to do doesn’t require third parties."